Posts tagged ‘sad’

The Public Service Loan Forgiveness (PSLF) program is a giant carrot for those of us stressing about the discrepancy between low nonprofit salaries and high student debt from Masters programs.

Unfortunately, a small mistake cost me a year’s worth of payments toward this program. Hopefully my post will prevent others from making the same mistake.

The PSLF, in brief: if you prepare your loans a certain way and make 120 on-time, in-full payments after graduation while employed full-time at a qualifying nonprofit organization, the remainder of your student loan debt is forgiven.

120 on-time payments translates to 10 years. If you take a break from nonprofits and then come back to the field, your eligible payments pick back up at the time you go back to full-time employment at a 501(c)(3). There are quite a few other areas of employment that are eligible, such as public education, government and military service.

I’ve told many interns and young professionals about PSLF when they express doubts about whether a Masters degree is ‘worth it’ in a field where any job with health insurance is considered a sweet gig.

Now that I’m in my late 20s, I’m starting to see friends leaving the field because they don’t feel like they will ever have the quality of life they want while still working in the nonprofit sector. And these are friends with Masters degrees! It’s a field you go into because you love it, but if your monthly loan payment tops $500 and you know you can do the same job and double your salary just by switching from 501(c)(3) to for-profit, well… it’s tempting. I’m grateful for the program, which is allowing me to stay in a field where my salary isn’t anywhere near my student loan debt (and I have a GREAT job).

So THANK YOU for the PSLF. Now let me try to explain how I messed it up so other people won’t do it too.

I graduated in May 2011, and immediately did what I thought I had to do to make myself eligible for the program.

I followed the steps outlined in sites such as FinAid and IBRinfo. First, I consolidated my loans. When you come out of an undergraduate or graduate program, you usually have separate loans for each semester. If you have both subsidized and unsubsidized loans, you could have multiple loans even within a single semester.

To make things more complicated, loans can be sold to various entities, so if you were to pay them separately without consolidation you could be sending money to a laundry list of banks, private lenders, and other institutions.

So I read the directions multiple times and consolidated my loans into a Federal Direct Consolidation Loan. This part was correct.

In January of 2012, the Federal government released an employment certification form, instructions and a Dear Borrower Letter. This was the first time you could officially sign up for PSLF, although qualifying payments made as early as October 2007 would count toward a borrower’s 120-payment term. It’s recommended that you file them annually and/or when you switch jobs, just to be sure everything’s in order. However, you don’t technically need to file until you’re ready to get the rest of your money back.

However, I saw the forms as insurance against any mistakes, and filed them in March. In June, I got a letter that confirmed I was eligible for PSLF. My employer counted, my consolidated loans counted, and I had 0 payments toward my 120.

Hold up.

I’d been paying into this for a year. Why zero? How did I lose a year’s worth of payments (which totaled over $5,400)?

My mistake: I put myself on the wrong repayment plan. Since I discovered this, three friends have found out they did exactly the same thing. Because it’s freaking confusing.

Here’s the explanation I discovered after multiple phone calls to FedLoan Servicing, who seem to be still wrapping their heads around this as well.

The repayment plans that count toward PSLF are income-based repayment (IBR), income contingent repayment, (ICR), and Standard repayment– only if the Standard repayment plan you’re on is the ten-year plan.

Catch that? The ONLY Standard plan that counts is the one where you pay off your loans in ten years.

Well… yeah, no shit. That means you’d be done paying them off at exactly the time when the PSLF kicks in. Actually, FinAid clarifies why they even mention Standard loans:

If a borrower were to use only standard repayment for repaying their loans there would be no balance remaining after 10 years and so no debt to cancel. Standard repayment is only provided as an option to address situations when a borrower is unable to continue under income-based repayment because they no longer have a partial financial hardship and the payments under income-contingent repayment exceed standard repayment. In such a situation the borrower would use standard repayment for the remaining payments and obtain some loan forgiveness at the end of the ten years of payments. (Click here to read more)

Okay, fair enough. So Standard repayment plans only apply to people who have been paying into the IBR or ICR, get a great gig (still in an eligible organization), and no longer qualify for IBR or ICR. They finish out their ten years on the Standard plan and still, hopefully, get a little back.

But I– and at least three of my friends– signed up for a different Standard repayment plan, one that’s on a 25-year time frame, and therefore have not made any eligible payments since graduation.

I feel lucky that I caught this after only a year. One friend had been making his on-time, in-full payments for four and a half years, and thus thought he was almost halfway to forgiveness. Unfortunately, you can’t do anything to make up for time lost.

My next step is to apply for Income-Based Repayment, which you also have to apply for every year to remain eligible (the more you know!). It looks like this may actually lower my payments, as my husband is now a full-time student so our household income is pretty low.

NO I DIDN’T FREAKING BACK UP. That’s everyone’s first question. Is it really normal for people to back up their hard drive? I wish I had, but I’ve been surprised by the number of people who seem shocked that no, I haven’t backed up onto an external hard drive, and no, I don’t have Dropbox. If I could go back I sure freaking would.

Platinum Data Recovery is saying there’s a 20% chance of recovery. If they can’t recover it, $300. If they can, $945, which makes me want to wet my pants a little bit but is a small price to pay for getting my shit back.

I’m trying not to think about the fact that when the weatherman says there’s a 20% chance of rain, nobody takes an umbrella.

I’m also trying not to think about everything on that hard drive. A brief sample:

My high school papers. Senior project report, writing for the theatre group I ran, every English essay.

Thousands of photos. I had Circle X’s photo archive, plus my own pictures going back to about 2003. Some of them are on Facebook. Not nearly all of them. At least I have a CD with my wedding photos. I’d be very sad to lose the last photos of my bunny Bentley, who passed away a few weeks ago. As her health deteriorated, I started taking lots of pictures of her. Bentley cuddling with Zack; Bentley sitting in a box; Bentley at the vet. I’d just transferred the last ones to my computer when it died.

Creative writing. I don’t think I have copies of most of the scenes, one-acts and personal essays I wrote during college. My Scripps email address closed when I left, so there’s no way to go back and get them.

All of my academic writing from college and graduate school. Unless I happened to email it to someone through Gmail, it was only on that hard drive. I know I have my undergraduate and Masters theses, but there were a lot of longer papers on things like British country house poetry and the familial relationships in Austen’s work.

So yeah. Pretty much 10+ years of all of my photos, creative writing, and my entire academic career. On a scratched piece of metal that’s about to go into something called a “clean room” for “extraction.” I’m picturing the clean room as the place the Architect hangs out in the Matrix sequels. The Platinum Data guys are all dressed in white linen suits with mirrored glasses, looking at my poor little hard drive on a big marble pillar. A green laser comes on, plays over the hard drive. It glows. The laser stops, and one of the white suit guys walks over and stares intently. Then… what? Do I get my shit back? Or does one scratch permanently wipe out everything I’ve put down on virtual paper since I was 16?